News

Appeal Tribunal holds that 10% uplift to general damages does not apply to ET awards

In De Souza v Vinci Construction UK Limited (UKEAT/0328/14/KN) HHJ Serota QC held that the 10% uplift to general damages which applies in the civil courts does not apply to Employment Tribunal awards. This leaves conflicting EAT authorities on the point.

Background

Following the Jackson Report into reform of civil litigation costs the Court of Appeal declared in Simmons v Castle [2012] EWCA Civ 1039 that as of 1 April 2013 “the proper level of general damages in all civil claims for (i) pain and suffering, (ii) loss of amenity, (iii) physical inconvenience and discomfort, (iv) social discredit, or (v) mental distress, will be ten per cent higher than previously […]”.

It was commonly thought that this 10% uplift applied to Employment Tribunal awards for the statutory tort of discrimination – including compensation for personal injury and injury to feelings. As such, the Presidential Guidance issued on 13 March 2014 made reference to the Simmons v Castle uplift applying to injury to feelings awards. In addition, in The Cadogan Hotel Partners Ltd v Ms Ozog (UKEAT/0001/14/DM) HHJ Eady QC made obiter comments supporting the same position and, on 1 December 2014, judgment was handed down in The Sash Window Workshop Ltd v King (UKEAT/0058/14/MC) in which Simler J held that the uplift did apply to Tribunal compensation for discrimination.

In the De Souza case at first instance the Employment Tribunal had awarded the 10% uplift on the Claimant’s personal injury award but had declined to award the uplift on the Claimant’s injury to feelings award. The Claimant appealed against the latter decision and the Respondent cross-appealed against the former.

Argument

The respondent, Vinci UK Ltd, argued that the Presidential Guidance and decisions in Ozog and Sash Windows were wrongly decided. In Ozog and Sash Windows the Simmons v Castle point had been a side-issue and the EAT had not had the benefit of proper argument nor full citation of the relevant authorities.

It was submitted that the 10% uplift to general damages declared by the Court of Appeal in Simmons v Castle was specifically provided as a quid pro quo for the fact that claimants in civil claims had lost the right to recover success fees and ATE premiums following funding reforms. As litigants in the employment tribunal had never had a right to recover success fees or ATE premiums the Respondent contended that the rationale for the 10% uplift could not apply to Tribunal awards.

EAT Judgment

HHJ Serota QC accepted Vinci’s submissions, rejected the appeal and allowed the cross-appeal. He concluded that the 10% uplift on general damages has no application to ET awards. The judge recognised that ordinarily the EAT should follow earlier EAT decisions buthefelt compelled to arrive at a different conclusion from the judge in Sash Windows and noted that the EAT in that case had not been addressed on all the relevant material.

Recognising the potentially wide effect of his decision (which applies to all discrimination claims in the Tribunals) and that there are now conflicting EAT authorities on this point, HHJ Serota QC gave the Claimant permission to appeal to the Court of Appeal.